Oil gains, stocks rally on renewed recovery hopes

NEW YORK (Reuters) - Crude prices rose and a gauge of global equities broke out of a three-week trading range on Wednesday as investors bet on a rapid recovery from the coronavirus-induced recession.

FILE PHOTO: Floor traders work space is seen on the trading floor after the closing bell, following traders testing positive for Coronavirus disease (COVID-19), at the New York Stock Exchange (NYSE) in New York, U.S., March 19, 2020./File Photo

Oil prices climbed 3%-4% on signs of improving demand and a drawdown in U.S. crude inventories, while a surge in Facebook Inc and Amazon.com Inc to record highs lifted the Nasdaq to within 5% of its all-time peak.

U.S. Treasury yields were little changed and gold edged higher, but gains were limited as risk appetite improved.

The markets are expecting economic recovery sooner rather than later, though there is a risk the slowdown isn’t as temporary as some think, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

“There’s a view that as the economy reopens there hasn’t been, so far, a resurgence in the hospitalization rates and that perhaps some of the ‘worst-ever’ data that we’ve seen will soon be behind us,” Arone said.

MSCI’s gauge of stocks across the globe gained 1.36% to within 1 point of 500, after the benchmark was unable to climb past 495 the past three weeks.

The pan-European STOXX 600 index rose 0.98% to close just shy of a three-week high, led by the tech, chemicals and energy sectors.

On Wall Street, the Dow Jones Industrial Average rose 369.04 points, or 1.52%, to 24,575.9. The S&P 500 gained 48.67 points, or 1.67%, to 2,971.61 and the Nasdaq Composite added 190.67 points, or 2.08%, to 9,375.78.

Federal Reserve policymakers re-upped a pledge to keep interest rates near zero until they are confident the U.S. economy is on track to recovery, a detailed summary of their most recent policy-setting meeting showed.